Correlation Between Thien Long and Agriculture Printing

Can any of the company-specific risk be diversified away by investing in both Thien Long and Agriculture Printing at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Thien Long and Agriculture Printing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thien Long Group and Agriculture Printing and, you can compare the effects of market volatilities on Thien Long and Agriculture Printing and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Thien Long with a short position of Agriculture Printing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thien Long and Agriculture Printing.

Diversification Opportunities for Thien Long and Agriculture Printing

0.05

Correlation Coefficient

Thien Long  Agriculture Printing

Significant diversification

The 3 months correlation between Thien and Agriculture is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Thien Long Group and Agriculture Printing and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agriculture Printing and and Thien Long is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Thien Long Group are associated (or correlated) with Agriculture Printing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agriculture Printing and has no effect on the direction of Thien Long i.e., Thien Long and Agriculture Printing go up and down completely randomly.

Pair Corralation between Thien Long and Agriculture Printing

Assuming the 90 days trading horizon Thien Long Group is expected to generate 1.48 times more return on investment than Agriculture Printing. However, Thien Long is 1.48 times more volatile than Agriculture Printing and. It trades about 0.15 of its potential returns per unit of risk. Agriculture Printing and is currently generating about 0.0 per unit of risk. If you would invest  5,081,829  in Thien Long Group on October 6, 2024 and sell it today you would earn a total of  1,218,171  from holding Thien Long Group or generate 23.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	84.38%
Values	Daily Returns

Thien Long Group  vs.  Agriculture Printing and

Thien Long Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thien Long Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Thien Long displayed solid returns over the last few months and may actually be approaching a breakup point.

Agriculture Printing and

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agriculture Printing and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Agriculture Printing is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Thien Long and Agriculture Printing

The main advantage of trading using opposite Thien Long and Agriculture Printing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thien Long position performs unexpectedly, Agriculture Printing can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Agriculture Printing will offset losses from the drop in Agriculture Printing's long position.

The idea behind Thien Long Group and Agriculture Printing and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.